L. Brooks Patterson: Oakland County budget outlook stable

Oakland County has bounced back from a near 14 percent drop in property taxes and its budget is balanced for the next three years, Executive L. Brooks Patterson reported during a recent address to county officials.

"I've got some friends in other counties, as you might imagine," said Patterson, who stood up to deliver the address to the Board of Commissioners on Wednesday night -- he's still in physical therapy following an August accident that left him in the hospital for months.

"Every time somebody, like in Wayne County, proposes a budget cut, there's a lawsuit -- there's no lawsuits here. We know what we have to do. We step up and make the necessary cuts."

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Some of the cuts that were made -- according to Patterson's budget recommendation address for fiscal year 2014 through 2016 -- were those to employee salaries.

Employees hadn't seen a raise since 2009, said Brooks. The need to "recruit and retain a quality workforce in the future" dictated his suggestion to incrementally raise salaries by 4 percent over the next three years, with a 2 percent increase in fiscal year 2014, which starts Oct. 1, and a 1 percent raise each in 2015 and 2016.

Patterson's general fund estimated revenue increases show steady rises, by as much as $4 million each year. The report shows the general fund at just less than $430 million in 2016, while the total budget for the 2014 fiscal year is listed at nearly $800 million.

One uncertainty in the projected budget, Patterson conceded, was how President Barack Obama's Affordable Care Act will affect the county's health-care costs. Likewise, plan rates have gone up in the triennial budget, from co-pays of $5, $10 and $25 to $5, $20 and $40.

"After several years of keeping expenditures flat for employee health care, it would be unrealistic to assume no increase in costs going forward," Patterson said. The report also includes an annual increase of 6 percent for employee health care in each of the next three fiscal years.

Assessed and taxable values, which dipped as low as 14 percent between 2007 and 2012, are projected to stabilize between 2013 and 2016, according to the budget, and rise by 1 percent.

"In a five-year span, we lost about 34 percent of our value," Patterson said. "At least the arrow is going north for the first time in years."

Personal property taxes -- a major source of revenue for some communities, Patterson said -- are in the process of being eliminated after state legislators passed a 2012 tax reform to phase out all industrial and commercial personal property tax.

"A lot of communities lived on that tax ... Highland Township and Midland -- close to 60 percent of their revenue comes from personal property tax, so you get rid of that tax, you're going to bankrupt that (area)," Patterson said.

The report recommends reducing personal property tax by $1.5 million for fiscal years 2014 and 2015 and $2.8 million for 2016.

Staff writer John Turk covers the Oakland County Board of Commissioners, police and general assignment. He can be reached at 248-745-4613.